Readers’ forum: Can accumulated income be drawn by director’s spouse?

My client carries on her part-time business by way of a personal service company. She works for several different firms and there is no control or supervision and no mutuality of obligation so I am as confident as I can be that there are no IR35 issues.

Because she had other employment and was liable to income tax at the higher rate the bulk of the part-time earnings were not drawn as salary or dividends and have simply accrued in the company’s bank account.

Her plan was to withdraw these moneys as dividends as and when she needed additional funds during her retirement. However having now retired from her full-time employment she finds that her personal and state pension income is higher than originally expected such that she is using almost all of her basic-rate income tax band. Her husband has a lower income with substantially more of...